Wealth tax debate returns, but execution is the hurdle

From AB Capital's The Opening Bell: Three Moves

Event

The Department of Finance (DOF) is now open to a direct wealth tax if it can be implemented effectively, while HB 8860 proposes a solidarity levy on individuals with net worth above P1 billion. We think the fiscal appeal is clear, but administrative feasibility will determine how much revenue is collectible.

View

This is not the first attempt. A 2021 "super-rich tax" bill proposed a similar 1-3% levy above P1 billion but remained at committee stage, while separate billionaire and ultra-wealth tax bills filed in 2026 are also still pending with the House Ways and Means Committee.

Catalyst

We think implementation is the central hurdle. The DOF previously warned that annual net-wealth taxes could encourage avoidance and capital flight, while valuation becomes difficult for private businesses, offshore assets and illiquid holdings. Stronger beneficial ownership disclosure and asset valuation would materially affect any eventual revenue yield.

Action

For markets, we would not treat the P570 billion revenue estimate as bankable until the tax base, exemptions and enforcement framework are clearer. A recurring 1-3% wealth levy could be material for asset-rich, cash-poor owners, potentially affecting holding company structures, dividends and capital allocation if legislation gains traction.

Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.